In March 2024, the regional economy achieves three consecutive years of uninterrupted growth
In March 2024, the regional economy of Madeira completed three years of continuous growth, as indicated by the Regional Economic Activity Indicator (REAI). The economic activity in March 2024 continued its positive growth trajectory, albeit at a slower pace compared to the previous month.
The Regional Directorate of Statistics of Madeira (DREM) emphasizes that March marked a full cycle of 36 months of sustained economic expansion.
As previously mentioned, the primary purpose of the RIEA, as indicated by the DREM in its initial release in October 2017, is to "signal the behaviour of economic activity, particularly with regard to its direction and magnitude of fluctuations: whether it is in a positive or negative trend, accelerations, decelerations, and identifying turning points." Therefore, its quantitative value assumes secondary importance, as it is not intended to substitute for the actual change of the Gross Domestic Product, which is determined through a broader and more comprehensive set of statistical data, even though a strong correlation exists between the two variables.
Economic Overview for March 2024 - 7 Key Themes
The Regional Directorate of Statistics of Madeira (DREM) provides a concise analysis of major short-term indicators, often utilizing three-month moving averages to smooth irregularities and highlight trends.
Economic Activity
As previously mentioned, the regional economic activity in March 2024, while still expanding, showed a slowdown compared to the previous month.
Tourism sector performance contributed positively, with overnight stays (excluding local accommodation under 10 beds) increasing by 2.4% in March, up from 0.7% in February. Total revenue in the tourist accommodation sector also rose by 10.8% (compared to 10.4% in the previous month).
Electricity distribution grew by 2.7% in March 2024, higher than the 2.0% recorded in February. Diesel consumption, however, saw a slight decline of 0.2% after a 0.4% increase in February.
Examining the ratio of companies incorporated to those dissolved, it is observed that in March 2024, 2.4 new companies were incorporated for each company dissolved in the Region, a higher proportion than the previous month (1.9).
Qualitative Indicators
Confidence indicators for March 2024 showed increases in the manufacturing, construction, and services sectors, but a decrease in the trade sector.
Private Consumption
Consumer activity indicators such as withdrawals from SIBS network ATMs and purchases using national bank cards grew by 6.4% in March 2024 (compared to 7.4% in February).
Gasoline released for consumption slowed with a year-on-year growth of 8.6% in March 2024, down from 9.6% in February. Meanwhile, purchases of new light passenger cars by residents decreased by 24.4% (compared to -5.3% in the previous month).
The balance of loans granted to households and non-profit institutions serving households decreased by 13.7% in March 2024, following a 14.9% decline in February.
Investment
Regarding Investment, the indicators for March 2024 are divided into two groups: those positive, such as sales of light commercial vehicles (17.3%; 10.2% in the previous February), housing bank appraisals (18.5%; 17.9% in the previous month), and building permits (21.7%; 18.2% in the previous month); and those in decline, such as the balance of loans granted to households for housing (-0.9%, the same decrease as in the previous February), cement sales (-3.1%; 5.4% in the last February), and the balance of loans granted to non-financial companies (-6.8%; -3.9% in February 2024).
External Demand
Despite representing a small fraction of overall trade by the Region (with most being with mainland Portugal), it's notable that both exports (-12.8%; -5.7% in February) and goods imports (-22.9%; -28.2% in the previous month) declined in March 2024. Cargo movement in ports (-1.6%; 0.0% in February) as a broader indicator of external trade dynamics also decreased compared to the previous month. Moreover, passenger movement at airports grew by 2.1% in March 2024, down from 2.8% in February, reflecting trends in ATM withdrawals and card purchases with international cards (9.0%; 9.7% in the previous month).
Labour Market
Data from employment agencies showed reductions in job offers (-38.0%), job applications (-7.0%), and registered unemployed (-7.9%) in March 2024.
Prices
In March 2024, the year-on-year inflation rate stood at 2.4%, down from 2.8% in the previous month, with goods inflation at 1.0% and services inflation at 4.4%. The underlying inflation rate (excluding unprocessed food and energy products) was 2.9%.
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